Zim Metro

BCC fight Zesa over power station

THE Bulawayo City Council has resumed its fight to block power utility, Zesa, from grabbing its power station without paying compensation.

The clash started in 1987 after Zesa proposed to take over the facility and refused to pay compensation arguing that it was a government parastatal. The power station has an installed capacity to generate 90MW.

According to the report of a meeting held on January 6 this year, the council resolved to authorise acting town clerk, Sikhangele Zhou to negotiate the compensation for the power station and any other properties in Zesa's possession that were still registered under the City of Bulawayo.

"That in the event that Zesa is not willing to compensate, the acting town clerk be authorised to instruct the city lawyers to defend the takeover in court."

The council owned power station, became part of Zesa in 1987 after the amalgamation of all local authorities' electricity undertakings.

"The city's assets related to the electricity undertaking then were worth some $63 million of which $26 million was outstanding in loans. However, there was no compensation. The reason given was that Zesa would operate as a government agent and beneficiaries would still be the same and therefore, there was no need for compensations," a council report read.

 This allegedly led to the four affected local authorities dragging Zesa to the High court in 1995 and they won the case.

"However, before the order was implemented, an out-of-court-settlement was reached and both parties agreed on a formula of calculating the royalties,"  read the report.

They then resumed the payments until 2008 when the conversion rate reduced the figure to nothing.

"ln 2009, council tried to engage Zesa to resume the royalties in view of the introduction of the multi-currency system but Zesa is not willing to pay. To date there is a standoff between Zesa and council on the issue of royalties."

Zhou said during royalties negotiations, the compensation issue was "kind of parked and no conclusion was arrived at".

"It was, however, apparent that this matter had not been concluded and for Zesa to simply take over without compensation was a clear case of unjust enrichment. This was our chance to fight for what rightfully belongs to us. We cannot just hand it over for nothing."

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